Are you expecting a bundle of joy?  With all the excitement of anticipating a new baby it’s important not to overlook how this little addition will change your finances.  Get your finances prepared right away with these tips:

1.  Start weekly savings immediately.  Get in the habit now of saving an additional $25 each week, or even more.  You can use this money as you plan for the baby’s arrival – or if it goes untouched it can be a great start to a college savings plan.  Once the baby arrives you will be in the habit of spending the extra cash, and then it can be shifted from going into a savings account every week and instead be used for expenses you don’t have now, such as diapers, formula and baby clothes.

2.  Make a list of the major items you will need.  Think about the big ticket items you will need before the baby arrives and write them down.  Included in this list should be: crib, changing table, car seat, stroller and high chair.  Writing these in a list will help you allocate the costs over the pregnancy, and allow you to explore alternate means to acquire everything.

3.  Shop alternative sources.  Once you have your list (see #2) start to plan where you can get these items.  Does anyone you know have an old crib they can pass down?  Don’t overlook resale shops for a changing table or other items.  Does the baby really need high-end designer digs?  Consider all options to get second-hand baby equipment.

4.  Be smart about your baby registry.  As cute as those Motley Crue onesies are, a well thought-out baby registry, containing only a few key big ticket items, will save you in the long run.  Let your friends and family know you would prefer they pool together for a big ticket item instead of individually buying small items that you can afford on your own.

5.  Change your W4 dependent tax elections.  If your little dependent will arrive any time this year his or her “dependency” status counts for the entire tax year.  As soon as you can in the year when your baby will be born, change the number of dependents on your W4 with your payroll or human resources department.  You are most likely declaring 1 for yourself and 1 for your spouse (plus another for any existing children).  Adding another “1” for your new dependent as soon as possible will decrease the amount of tax taken out of each paycheck, which of course will increase your take home pay.

The more you plan during pregnancy, the easier a new baby will be on your finances.

Further Reading

• 5 Ways to Save on Your New Baby (1)
• What you’re saying about : Savings Accounts, AAA, and Seven Jeans (2)
• Blog Round-Up : Goals, Baby Showers, Coupons, and Pets (1)
• Tough Economic Times Call for Being More Open-Minded (0)
• First Credit Card? 6 Ways to Start Building Your Credit (0)

Tags: Baby, Car seat, Charity shop, Children, money, Pregnancy, Savings account, Shopping

This entry was posted on Thursday, January 29th, 2009 at 12:31 pm and is filed under Budget. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.